International Supply Chain Management in Canada - Term Paper Example

Management International Supply Chain Management Introduction International logistics and supply chain management in general terms can be describedas the process of effectively strategizing and managing multiple activities all aimed towards carrying out sourcing and efficient transportation of goods from one location to another. With the current development within the industrial sectors, these concepts of goods and service transportation has gained high significance and thus has also attained considerable amount of growth (Hakkinen, 2005). These types of organizations mostly act as third parties between two business bodies and effectively carry out goods exchanging operation between them. In this discussion the focus will be towards an organization named the ‘International Logistics Inc.’ (Council of Supply Chain Management Professionals (CSCMP), 2014). This organization is a United States (US) based company and has been in the business of manufacturing and distribution of high tech equipment. This organization has got a huge global network and holds a specific ranking in context to providing effective exportation of its high quality equipment to the customers at competitive rates. Currently this company has been making efforts towards identifying new market space for establishing new infrastructure and simultaneously continuing with its growth rate. In this backdrop, the purpose of this discussion is to identify the various marketing and development opportunities of this logistics and supply chain organization within Canada. Details will be also mentioned regarding the strengths and weaknesses of this organization along with formulation of effective supply chain and transportation plan for setting up within this new proposed location. Discussion In this context, the country which has been chosen for this logistics and supply chain management organization to carry out its business process is Canada. In order to carry out an effective business within this new nation, it will be necessary that adequate amount of information are accumulated regarding the various advantages and disadvantages associated this nation that will allow the organisation to frame its strategies for successful expansion of its business in this particular geographical location. Such type of data can be extracted by effectively carrying out a PESTEL analysis on Canada. PESTEL Analysis of Canada Political Aspects The political system operating within this nation considers specific framework determined by the collective efforts of the ‘parliamentary democracy’ along with that of ‘federal system of parliamentary government’. Adding to that, the nation also follows a democratic tradition. The nation also seemed to have established successful free trade agreement with European Union. However, the nation still seems to be making efforts in context to stabilizing its feet after being struck by the economic crisis in the recent times. The nation seems to be possessing about 8.6 % of unemployed population (Bernard, 2013; Bennett & Bayley, 2012). Despite of all these, the nation’s government seems to be posing high control over its supply chain management sectors. . This subsequently affects other domestic and international business processes operating within the nation. The tight control over the logistic industry has deprived Canada from attaining expected share of profits from the global market. Thus as a matter of fact, International Logistics Inc. will be facing high levels of political barriers regarding their establishment within Canada. However, the business proposal can be expected to be benefiting only if the nation’s government projects flexibility towards this logistics and supply chain organization which is yet to be seen in the long run (Findlay, 2012). Economic Aspects If seen from an economic perspective, Canada can be stated as one of the wealthiest nations of the world. Between the periods of 2009 to 2013, the nation was able to attain a GDP growth rate of 1.7% even while going through the economic crisis period (The World Bank Group, 2014). Adding to that, the average inflation rate during this period for this nation was about 1.52% (Triami Media BV, 2012). Apart from all these, the nation seems to be earning a majority portion of its annual earnings from its service sectors. All these factors help in concluding one fact, that this nation will be highly advantageous for International Logistics, Inc. if the political implications are ignored. Since this company is both into production and distribution finished goods and so it will be having high chances of attaining sustainable growth in this new nation. Moreover, since the inflation rate has remained stable over the past few years, the company will be having an additive advantage in term of low priced and easily available raw materials (Sable, 2008). Socio-Cultural Aspects If seen from a socio-cultural perspective, the nation has seen a massive hike in its population growth rate within past few years. One major reason for such a population hike is due to the increase in the number of foreign immigrants who come and get settled within this nation in search of jobs. Moreover, the attitude of the local inhabitants seems to be healthy and warm towards foreigners. Overall the nation supports the multicultural concept. To certain extent, these factors can act as an advantage for International Logistics, Inc. regarding the availability of easy workfare for quick establishment (Beynon et al., 2005). Technological Aspect Canada has attained significant development in the areas of technology over time. The nation possesses high level of industrial development and expenses a significant portion of its annual earning over research and development projects. Adding to that, by taking into consideration of the environmental pollution issues, the Canadian government has been focusing towards implementing alternative power generation techniques. All these facts can be considered as an advantageous for International Logistics, Inc. since this company has already been into the manufacturing of high sophisticated technological equipment. There seems to appear high rate of business proposals for this organization in Canada (Federation of Canadian Municipalities, 2014). Environmental Aspect The nation’s environment factor appears to be favourable enough for this high-tech goods manufacturing and distribution organization. The temperature appears to be mild enough within major portion of the nation and can be easily sustained. Adding to that, regarding the transportation part, the nation has an approximate length of 900,000 km of road network which supports the nation’s entire traffic system. The entire road network is controlled and maintained through collaborative efforts of the government and some private companies (1Government of Canada, 2014). Regarding the railway network, it can be said that this nation also has the largest railway network in the world covering a total length of 48,000 km (2Government of Canada, 2014). The nation also seems to be highly developed regarding carrying out of effective water ways transportation. Apart from all these, the nation also possesses a well-established airway transportation system which is maintained by the collaborative effort of the government and multiple other domestic and international aviation industries (3Government of Canada, 2014). Taking all these factors into consideration, it can be stated that the establishment of International Logistics, Inc. in Canadian soil will be highly beneficial to this company both in the long as well as short term perspective. Legal Aspect In context to legal aspect, the Canadian government doesn’t seem to pose many restrictions towards foreign industrial establishment but seems to be pretty strict regarding the production quality of goods and services. To the government, the safety of the inhabitant’s interests is a prime concern. Along with that, every business process needs to undergo high level of authentication related documentation in order to attain their licensing. This might prove as a slight issue for this company to establish its branches in Canada (Sable, 2008). Supply Chain Assessment The general background can be considered for this concept regarding how to make the entire supply chain management process much more effective in the markets of Canada. For this company to establish its infrastructure in Canada, a totally new plan of supply chain management will be needed to establish. For this manufacturing and distribution company, three crucial factors are needed to be kept in mind in order to make their SCM process effective. These three factors are A) the right people B) the right technology C) the right process Taking the first factor into consideration regarding the new location it is quite clear that Canada has abundant supply of skilled and effective workforce availability. Moreover, the resource availability within this nation also doesn’t seem to be a problem. Above all the company is a technology based manufacturing company so it will be high demand of skilled labour force. The hiring process should be done based on certain specific guideline which needs to be set by the company (Profit Point, Supply Chain Consultants, n.d.). For the second factor, the company needs to implement newer methods of goods tracking and sorting techniques in order to considerably speed up their operation. Retrospectively, the nation has already been investing significantly into technological development so it won’t be a major problem for the company to expand its supply chain in in this country. Moreover, the company should first observe the domestic business process and their technological aspects before coming up with a new and innovative idea for attaining higher market share. In terms of process, the company needs to select the mode of distribution depending on its effectiveness. For instance road and railway route distribution techniques will be cheaper than air transport but will be much more time consuming. Other factors include whether to carry out every operation process themselves or to outsource it (Profit Point, Supply Chain Consultants, n.d.). Transportation Plan International Logistics, Inc. is completely new to the markets of Canada and will be requiring an effective transportation medium for carrying out its operations. So there can be two ways through which this company can frame its transportation strategy. The first alternative will be outsourcing the entire logistics operation to third party logistics organizations. And the second alternative will be in terms of forming its separate logistics unit within this new market. The difference between the two being that, the primary alternative will be cost effective while the second alternative will have less advantage for the company. Thus as an effective plan, the company should go with the first alternative. Apart from this, the second plan is that the company should also strategize regarding the type of transport to choose i.e. whether to choose ground transport, air transport or water transport. As an effective strategy, the company should utilize a mix of these transportation techniques depending on the type and delivery priority of the consignment. The third plan should be regarding the type of tracking and city guidance technique to be used to minimise the level of delivery delays (Soltania et al., 2010). Recommendations for Implementing the Transportation Plan Based on the above identified factors certain imperative recommendations can be propounded. The first recommendation should be regarding targeting of specific customers for specific product type and strategizing the consignment delivery technique accordingly. For instance, customers who purchase high end products of this company should be given prior preference in term of response and delivery. The second recommendation can be that the company should implicate both type of transportation technique i.e. through outsourcing as well as through establishment of their own logistics segment within this new market. The third recommendation can be regarding the use of GPS navigational techniques to avoid dense traffic areas and determination of optimal routes to avoid delivery delays. The fourth recommendation should be regarding partnering up with local brands for attaining substantial help in terms of both production and distribution. Conclusion From the entire above discussion, multiple aspects can be concluded regarding the effective establishment of this company within Canada. If seen from an overall view, the proposition of this company regarding its setup in Canada can be highly profitable but it must ensure the utilization of the available resources and facilities in cost-effective manner. Canada seems to be having lot of positive perspective for industries to setup and operate within its domestic market due to the availability of resources and monetary support. Although being tightly controlled by the government, but still the domestic market of this nation appears to be huge enough for industry to develop and flourish at significant rates. References Bernard, A. (2013). Unemployment dynamics among Canada’s youth. Economic Insights, 1-7. Bennett, C. J. & Bayley, R. M. (2012). A comparative analysis. Canadian Federal Political Parties and Personal Privacy Protection: 1-44.  Beynon, J. Larocque, L., Ilieva, R., & Dagenais, D. (2005). Research on immigration and integration in the metropolis. Working Paper Series, 1-29.   Council of Supply Chain Management Professionals (CSCMP). (2014). CSCMP Supply Chain Management. Retrieved from http://cscmp.org/about-us/supply-chain-management-definitions Federation of Canadian Municipalities. (2014). The Canadian Environmental Technology Advancement Centres (CETACs). Environment Canada, 1-3. 1Government of Canada. (2014). Road transportation. Retrieved from http://www.tc.gc.ca/eng/road-menu.htm 2Government of Canada. (2014). Rail transportation. Retrieved from http://www.tc.gc.ca/eng/rail-menu.htm 3Government of Canada. (2014). Air transportation. Retrieved from http://www.tc.gc.ca/eng/air-menu.htm Hakkinen, L. (2005). Impacts of international mergers and acquisitions on the logistics operations of manufacturing companies. Technology Management, 29, 362-363. Profit Point, Supply Chain Consultants, (n.d.). Are you struggling with a standardized supply chain? Supply Chain Assessments. Retrieved from http://www.profitpt.com/services/supply-chain-assessments/ Sable, A. (2008). Description and analysis of the environment. Sector Note on the Canadian Business Services Sector and the Canadian Management Consulting Market, 1-26. Soltania, E., Azadegan, A., Liao, Y., & Phillips, P. (2010). Quality performance in a global supply chain: finding out the weak link. International Journal of Production Research, 49 (1), 269-293. The World Bank Group. (2014). GDP growth (annual %). Retrieved from http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG Triami Media BV. (2012). Inflation Canada 2012. Retrieved from http://www.inflation.eu/inflation-rates/canada/historic-inflation/cpi-inflation-canada-2012.aspx Read More